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Stock liquidity and tone of press releases

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  • Rong Gong

Abstract

This paper presents evidence that higher stock liquidity makes firms increase tone of press releases. I find that firms with higher stock liquidity have higher tone in press releases, relative to the tone of news initiated by media, than firms with lower stock liquidity. This relation is stronger for firms with greater short‐term pressure, that is, with greater transient institutional ownership, greater sensitivity of manager's wealth to stock price, and more analyst coverage. This finding suggests that stock liquidity, by producing short‐term pressure on firms, leads firms to boost press release tone.

Suggested Citation

  • Rong Gong, 2024. "Stock liquidity and tone of press releases," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 64(2), pages 1921-1945, June.
    • Handle: RePEc:bla:acctfi:v:64:y:2024:i:2:p:1921-1945
    DOI: 10.1111/acfi.13205
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